Financial Instruments

9 Months Ended

Sep. 30, 2016

Financial Instruments

Financial Instruments

4. Financial Instruments

The Company elected to invest a portion of its cash assets in conservative, income earning, liquid investments effective September 2015. Cash equivalents and investments, all of which are classified as available-for-sale securities, consisted of the following:

	September 30, 2016								December 31, 2015
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized (Loss)		Estimated Fair Value		Amortized Cost		Gross Unrealized Gain		Gross Unrealized (Loss)		Estimated Fair Value
	(in thousands)
Money market deposits	$	9,811	$	—	$	—	$	9,811	$	5,966	$	—	$	—	$	5,966
U.S. Treasury securities		75,455		131		(21)		75,565		104,537		1		(725)		103,813
U.S. agency securities		64,299		183		(13)		64,469		79,491		—		(638)		78,853
Municipal securities		17,629		61		(7)		17,683		18,974		2		(56)		18,920
Total	$	167,194	$	375	$	(41)	$	167,528	$	208,968	$	3	$	(1,419)	$	207,552
Classified as:
Cash equivalents							$	9,811							$	5,966
Short-term investments								157,717								201,586
Total							$	167,528							$	207,552

The Company invests in U.S. Treasuries, U.S. agency and high quality municipal bonds which mature at par value and are all paying their coupons on schedule. The Company has therefore concluded there is currently no other than temporary impairment of its investments and will continue to recognize unrealized gains and losses in other comprehensive income (loss). During the three months ended September 30, 2016, the Company had immaterial realized gains and losses. During the nine months ended September 30, 2016, the Company had $0.2 million in realized gains and immaterial losses for a total net realized gain of $0.2 million. The Company uses the specific investment identification method to calculate realized gains and losses and amounts reclassified out of other comprehensive income to net income. As of September 30, 2016, the Company has nine investments in an unrealized loss position in its portfolio. The Company earned interest income of $0.4 million and $1.2 million, respectively, during the three and nine months ended September 30, 2016. The following table summarizes the Company’s portfolio of available-for-sale securities by contractual maturity as of September 30, 2016:

	September 30, 2016
	Amortized Cost		Fair Value
	(in thousands)
Less than one year	$	44,540	$	44,539
Greater than one year but less than five years		112,843		113,178
Total	$	157,383	$	157,717